Retail and entertainment: Walmart inks agreement to acquire VIZIO and its SmartCast operating system

Walmart and VIZIO have entered into an agreement for the former to acquire the latter for $11.50 per share in cash, equating to a fully diluted equity value of approximately $2.3 billion.

The deal is subject to regulatory clearance and other closing conditions specified in the merger agreement.

Walmart says that the acquisition of VIZIO and its SmartCast Operating System (OS) will enable it to “connect with and serve its customers in new ways including innovative television and in-home entertainment and media experiences”.

It will also create new opportunities to help advertisers connect with customers, equipping brands with differentiated and compelling opportunities to engage at scale and to realise greater impact from their advertising spend with the US retail giant.

The combination is expected to accelerate Walmart’s media business in the US, Walmart Connect, bringing together VIZIO's advertising solutions business with Walmart’s reach and capabilities.

These benefits would be further strengthened by the growth of connected TV platforms and Walmart’s TV panel sales.

“There is a lot to be excited about with this acquisition,” says Seth Dallaire, Executive Vice President and Chief Revenue Officer, Walmart U.S.

“We believe VIZIO’s customer centric operating system provides great viewing experiences at attractive price points.”

“We also believe it enables a profitable advertising business that is rapidly scaling. Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week. We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment.”

“This is the ideal next chapter in our history. By bringing our capabilities and resources together, we’ll drive innovation and create even more value for our customers,” says William Wang, Chief Executive Officer at VIZIO.

“Walmart’s approach is aligned with our mission and vision, and our technology will help bring a scaled, connected TV advertising platform to Walmart Connect. This transaction delivers immediate and compelling value to VIZIO stockholders and is a true testament to the hard work of the entire VIZIO team.”

“This is about competing with Amazon”

The deal is a game-changer for the retail and streaming sectors, even if it's not ultimately so surprising, according to Alex Yip, Director of Product, CTV at AppsFlyer.

“Walmart is not only adding a popular private label TV brand to its portfolio, but also gaining access to a huge amount of first-party consumer data that will enhance its advertising and streaming capabilities,” he says.

“The company will be able to leverage V=the SmartCast platform to promote its own products and services, such as Walmart+, as well as sell more targeted ads to third-party advertisers who want to reach its customers.”

“Walmart+ has already seen the development of really smart and successful partnerships with Paramount+, Roku, TikTok, NBCUniversal and others, and it will be interesting to see how this potential deal affects those existing relationships.”

He concludes: “At the end of the day, this is about competing with Amazon. Whether Walmart decides to start producing its own streaming content or partnering with other providers will be interesting to see and this reminds me of Apple's foray into the market --which has ended up with Emmys and Oscars wins for the brand.”

“This deal will help Walmart diversify its revenue sources, increase its customer loyalty, and challenge Amazon’s dominance in the e-commerce and streaming sectors.”